May 2008

From the Director

More and more often these days, in conversations among people working in the real estate industry, we’re hearing words like carbon footprint, building performance, energy efficiency retrofits. Those words reflect profound changes. Within the marketplace, sustainability is becoming a measure of value. Within the academic and business realms, the chancellors of major universities and the CEOs of major corporations are adopting ambitious sustainability initiatives.

Within the civic realm, New York’s mayor is rallying the city to achieve long-term sustainability goals. Those goals, set forth in the City’s plaNYC 2030, are nothing short of historic. The one that’s gotten the most press is the goal of reducing the carbon emissions that are driving climate change. The city’s building stock is responsible for the lion’s share. This makes the real estate industry a major player in this undertaking. In his January 2008 State of the City address, Mayor Michael R. Bloomberg said,

. . . we’ll join forces with the real estate industry to make new construction and old buildings greener. This is the single most important thing we can do to reduce our carbon footprint.

Making new construction greener is laudable, of course, but in fact its contribution to 2030 goals will be small. In 2030, it’s projected, 85% of energy use will come from buildings that exist today. This fact places the carbon challenge squarely before us right now.

A growing business risk – and opportunity

But I suspect that an even larger, more encompassing City goal may be of greater immediate concern to the real estate industry: ensuring that energy supplies are not only environmentally sustainable but reliable and affordable. This entails a tangled set of issues, some highly technical and involving the physical and market infrastructure for delivering electricity, that if not resolved have the potential to further weaken the city’s economy. In chilling language, the City’s April 2008 progress report on plaNYC cautions that, absent a broad set of measures, not only will carbon emissions continue to rise; future supplies of electricity will be costlier and compromised.

Put bluntly, this means that parties who don’t reduce their demand for electricity are raising the risks of brownouts, blackouts, and price hikes for everyone. Conversely, as each party achieves greater energy efficiency, all benefit.

In a city that largely runs on fossil fuels, reducing carbon emissions and energy consumption isn’t easy. Compounding the problem, we must act quickly. As the international scientific community warns us ever more loudly, the hour is late. Business as usual has become dangerously risky.

Business as usual has also become needlessly costly – and here some powerful incentives come into play. With energy prices high and volatile and the economy in a downturn, achieving greater energy efficiency does more than shrink carbon footprints and reduce aggregate demand. It directly benefits the individual customer, yielding savings that flow to the bottom line. What’s more, buildings that boast energy efficiency and other green features are rapidly gaining a market edge.

A central role, a major commitment

Achieving sustainability is a gravely serious challenge. It’s also an exciting opportunity: combined, those goals and incentives hold transformative power. But change demands that all of us, at every level of every company, institution, and organization – from boardroom to boiler room – learn new ways of thinking, acquire new knowledge, adopt new practices.

CUNY has launched a major sustainability initiative and pledged to help the City meet its goals. As part of CUNY, the Newman Real Estate Institute shares this mission. As an essential resource to the real estate industry – through our courses, workshops, research, publications, and public events – we’re ideally positioned to advance the knowledge base and accelerate the knowledge transfer that can help move sustainable technologies and practices into the mainstream faster.

Accordingly, we’ve designed a set of sustainability initiatives that span our entire agenda. In what’s a fast-evolving field, we aspire to become a dynamic center of learning and research that can serve the real estate community in New York and other cities around the world. Fully realizing this role means shaping our Institute’s education and research capabilities and public events to meet real-world needs. I hope you’ll explore the web pages that describe our initiatives and will contribute your requests and suggestions, by contacting individuals named in those pages or Sara Hilska Taylor. We’ll welcome your thinking.

As we scale up our efforts at the Newman Institute, we salute the men and women who are working toward the City’s 2030 goals. In this long-term process, New Yorkers’ legendary talent, creativity, and energy are sure to prove an asset, along with the strong personal commitment and shared sense of mission that I increasingly encounter among people in the field.

What’s happening in the field prompts another observation, too: over the long term, progress toward 2030 goals is likely to produce more than gains in sustainability. New partnerships and collaborations are already emerging that may yield benefits we can’t foresee. Our Institute will itself be changed, and further strengthened, by the change that we promote and that you contribute to.

Jack S. Nyman, Director
Steven L. Newman Real Estate Institute
Baruch College, CUNY